Ode To Capitalism

I never quite seem to get over the astonishing amount of discriminating regulations; tariffs and subsidies – that some claim to be implemented by “democracy”. I found this on Carpe Diem describing the current U.S situation:

“Most Americans think of the U.S. as a free-trade country with open markets, and China as a protectionist country with closed markets.  And yet the U.S. is quite protectionist, with more than 12,000 tariffs (i.e.taxes) on imported products that are sometimes as high as 350% in the case of tobacco (pictured above); 164% on peanuts; 100% on jam, chocolate and ham; and 48% on sneakers, see the 25 American Products That Rely On Huge Protective Tariffs To Survive.”

Readers who are familiar with comparative policies, recognize that no country is completly liberated from distinctive trading regulations. Some nations are clearly more restrictive relative to others; Let us take a closer look at Norway. The value of Norway’s total exports and imports of goods and services in 2001 amounted to 75 per cent of total value added (GDP), while the average for all countries is about 45 percent. This Nordic nation has in selected industries a more capitalistic approach to world trade; The petroleum related exports are a pivotal contibutor to our national wealth (and state controlled pension fund - world’s second largest Sovereign wealth fund). With high oil prices the consumers naturally benefits from abundant job creation and solid purchasing power. Conclution: No need for too much government intervention.

A Public Enemy?

But some segments like agriculture, where we do not seem to profit from production in any way, are obviously more restrictivly regulated compared to other nations. So why do we accept policies that makes our food expensive? Just by crossing the border and buying your eggs in Sweden you reduce the price by over 50 %  - but the government regulates to prevent individuals (the democracy) in Norway to benefit from the price difference. I partially understand the self-sufficiency-, health – and environmental arguments pro-subsidies, but doesen’t jobs creation and reduction of hunger and poverty in developing countries trumph the doubtful former arguments? In Norway the parliament slap a 555 % custom duty on imported chicken and about 400 % tax on imported meat and milk. We destroy overproduced eggs, farmers demand higher prices on meat when they manufacture more than the consumers want to buy – and every family pays about 143 USD (800 NOK – total: 1 Billion NOK) in subsidies to exported our national cheese Jarlsberg. Let me remind you of this graph from The Economist showing how selected countries spend taxpayer money on agriculture:

“Farmers are getting by with fewer subsidies in many countries around the world compared with 20 years ago. Yet subsidies still accounted for more than three-quarters of farmers’ incomes in Norway, Switzerland and Iceland between 2007 and 2009. And farm subsidies in the EU made up a slightly greater proportion of farmers’ incomes in 2007-09 than two decades beforehand.”

Addendum: The Swiss finance minister; Hans-Rudolf Merz – when he earlier this month burst into a giggle fit while reading a bureaucraticly formulated speech. Subject; spiced meat imports. In this clip he tells a joke – for me that perfectly summarizes many of the tariffs as one concept- a ridiculous joke!!